ALSO READTrump imposes 25% extra tariff and penalty on India
Tariffs on steel, aluminium, auto and auto components were never suspended or kept in abeyance. The tariff on steel imports from India was doubled from 25% to 50% effective June 4. Similarly, aluminium imports from India also saw their tariffs rise from 25% to 50% starting the same date. Similarly, in the auto sector, the US imposed a 25% tariff on fully assembled passenger vehicles as of April 3. A 25% tariff on auto components was introduced on May 3. These tariffs remain fully in effect and were not suspended or paused. These duties were implemented under Section 232 and India has responded by proposing retaliatory measures at the WTO.
Calls and text messages to several executives across these sectors went unanswered till press time. However, some acknowledged they were evaluating the potential fallout on business operations.
“We should relook our trade policy and diversify our trade. We have made a mistake by relying too much for our trade needs on US and China. Now is the time for correction,” said Niranjan Hiranandani, founder and MD, Hiranandani Group.
Harsh Goenka, chairperson of the RPG group, tweeted on Wednesday evening that Trump’s 25% tariffs would have wide-ranging implications for India Inc. This included a hit to US exports, MSMEs and jobs were at risk, strain on trade surplus with the US and pressure on the rupee and current account. He also warned that export-driven GDP growth would be slower. And Russian oil & arms deals were under fire.
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A Tata Group executive said the impact of Trump’s announcement would need to be assessed carefully. Some executives expressed hope that the Modi government and the US trade team would return to the negotiating table following the announcement.
Affected sectors
The jewellery sector, which exports over $9 billion annually to the US, also faces serious headwinds, they added. The outlook for textiles and apparel is mixed — while some categories might gain if the US raises duties on Chinese or Vietnamese goods, India could lose share in high-margin segments due to rising costs.
“The announced levy of 25% will indeed be a surprising twist to our expectations on the way the trade talks were proceeding. If the proposed terms do come into effect, it will make our products 7% to 10% more expensive than some of our competitors. And it will certainly hurt our apparel exports to the US,” Rahul Mehta, chief mentor, Clothing Manufacturers Association of India, said.
Goods such as dairy, processed food, tea, and marine products now fall into a 25–27% tariff bracket, hurting their price competitiveness in the US and prompting many exporters to explore alternative markets.
Meanwhile, sectors spared for now are breathing a sigh of relief. Indian pharmaceutical exports — a key component of its trade with the US — remain outside the tariff net. Categories like cashew, footwear, and select apparel lines also remain viable due to relatively better tariff treatment compared to competing countries, experts said.